Mills v Futhem Pty Ltd

Judgment - Ex tempore 1This is an application for a stay of judgment that has been granted in the District Court. It arises in some unusual circumstances. The Respondent was the landlord of some commercial premises of which the Applicant was the tenant. The Respondent brought some proceedings in the District Court contending that there had been a failure to pay rent. Those proceedings were settled on the terms of some Terms of Settlement that the parties executed on 25 November 2008. Those Terms of Settlement were in the form of Form 33 version 2 under UCPR . The Terms of Settlement had, as their operative part: "BY CONSENT AND WITHOUT ADMISSIONS

1. Verdict and Judgment for the Plaintiff in the sum of $76,000.00 inclusive of costs.
2. Provided however, the defendant pays the sum of $60,000.00 by way of 36 equal monthly instalments of $1,666.67, the first payment to be made on 30 November 2008, the judgment debt shall be deemed satisfied.
3. If the Defendant defaults on any two monthly instalment payments the Plaintiff may seek leave to issue a Writ of Execution forthwith for the full amount of the judgment debt.
4. These terms not to be disclosed." 2The Terms of Settlement were filed in the District Court on 27 November 2008. No document precisely complying with UCPR Form 44 (which requires the terms of the orders the Court is asked to make by consent to be set out verbatim) was filed. On 16 December 2008 a Registrar of the District Court endorsed the front page of the Terms of Settlement by filling in the space that says, "date as made or given" , and also by filling in the space in the form that says "date entered". Against each such space was written "16/12/08". The stamp of the District Court was placed along side those entries. 3A copy of the computerised records of the District Court contains the following entry for 16 December 2008: "Judg'm Terms of Settlement entered; add to Completed CML" 4On 29 April 2010 the Registrar signed and sealed a document entitled Judgment/Order which reads: "Date of judgment/order Date made or given 16 December 2008 Date entered 16 December 2008 Terms of judgment/order Judgment: JAY LYNETTE MILLS, First Defendant is to pay FUTHEM PTY Ltd, First plaintiff the sum of $76000.00 Judgment Terms of Settlement entered Judgment Amount $76,000.00; Costs $0.00; Interest $0.00; Comment; Instalment Orders" 5On the basis of that document of 29 April 2010 some bankruptcy proceedings have been commenced in the Federal Magistrates Court. Those proceedings have been stood over from time to time so that it can be ascertained whether this Court will grant a stay of the District Court order. 6The present application for leave to appeal is made concerning the disposition by the District Court of a Notice of Motion filed there on 11 June 2010. That Notice of Motion sought the following orders: "1. That until further order, any proceedings seeking to enforce any order or putative order related to the "Terms of Settlement" dated 25 November 2008 and filed with this Honourable Court on 27 November 2008 ("the Terms") be and are hereby stayed. 2A. That the "Judgment/Order" apparently issued by the Registrar of this Honourable Court on or about 29 April 2010 be and is hereby set aside. 2B. The judgment/order apparently made in November/December 2008 is hereby set aside. 7On 26 May 2011 her Honour Judge Truss determined that Notice of Motion. She dismissed it, with costs. The application for leave to appeal is from her dismissal of that motion. 8The Applicant was represented today by Mr de Robillard of counsel. He submits that if the Court has indeed made an order that the terms not be disclosed, that order would contravene the requirements of UCPR 36.1A(2), which provides: "Unless the court, for special reasons, otherwise orders, the court must refuse to give judgment, or order that judgment be entered, in terms that restrict, or purport to restrict, any disclosure of the terms of the judgment or order." 9I note that UCPR 36.1A(3) goes on to say: "Subrule (2) does not limit the effect of any agreement between the parties that contains provisions that restrict the parties, or purport to restrict the parties, from disclosing the terms of the agreement or of the judgment or order." 10There is a question for determination about what precisely is the order that the District Court has made. The Judge in the Court below said, [30]: "The evidence before the Court does not enable me to determine if and when the judgment was entered into the Court's computerised record system (subr (2)). In any event, the extent that the defendant relies on r (2A), in this case the Court did not direct that judgment be entered. The Court did, in fact, enter the judgment [on] 16 December 2008 (on the front page of the terms of settlement)." 11There may be some difficulty in succeeding on appeal in any contention that any order that has been made in the District Court is a nullity because it contravenes UCPR 36.1A, as s 63 Civil Procedure Act 2005 provides: "(1) This section applies to proceedings in connection with which there is, by reason of anything done or omitted to be done, a failure to comply with any requirement of this Act or of rules of court, whether in respect of time, place, manner, form or content or in any other respect. (2) Such a failure: (a) is to be treated as an irregularity, and (b) subject to subsection (3), does not invalidate the proceedings, any step taken in the proceedings or any document, judgment or order in the proceedings. (3) The court may do either or both of the following in respect of proceedings the subject of a failure referred to in subsection (1): (a) it may, by order, set aside the proceedings, any step taken in the proceedings or any document, judgment or order in the proceedings, either wholly or in part, (b) it may exercise its powers to allow amendments and to make orders dealing with the proceedings generally." 12However, s 63(3) allows the reader to then turn to UCPR 36.15 and UCPR 36.16 which sets out in a little more detail the circumstances in which an order may be set aside and varied. Setting aside any purported order was one of the orders the judge below declined to make. 13The matter in this Court was started with some urgency. The summons seeking leave to appeal was filed on 31 May 2011. The matter came before his Honour Justice Macfarlan the next day. His Honour granted a stay until 13 June and gave some directions. That stay came to be extended until today. 14An Applicant for a stay has an onus of establishing that there is a prospect of success in the appellate proceeding (here the application for leave to appeal), and also of putting forward a basis that is fair to both parties on which the stay can be granted. Mr de Robillard proffers, on behalf of his client, an undertaking not to dispose of or encumber her assets other than in the ordinary course of business pending the determination of the appeal or further order, and an undertaking to bring the proceedings on with expedition. The bankruptcy proceedings are returnable in the Federal Magistrates Court tomorrow. If a stay is not granted today there is a very real risk that an order for bankruptcy would be made. That would cause significant hardship to the Applicant. One relevant matter is that she earns her living as a real estate agent, and bankruptcy would have a detrimental effect on her licence. No evidence of hardship being caused to the Respondent as a consequence of the stay being granted has been put forward. 15In my view, there is a question to be tried concerning the precise terms of any judgment that has been entered in the District Court. I bear in mind that in construing a consent order, it is permissible for the Court to look to surrounding circumstances: Kirkpatrick v Kotis [2004] NSWSC 1265; (2004) NSWLR 567; Athens v Randwick City Council [2005] NSWCA 317; (2005) 64 NSWLR 58. 16The very existence of UCPR 36.1A may itself be such a surrounding circumstance, which would tend against there being an order of the Court that the terms not be disclosed. However the fundamental matter, it seems to me, is the terms of any order that the District Court has in fact made, if indeed the annotation of the Terms of Settlement by the Registrar and the terms of the entry made in its computer records amounts to the making or entering of an order at all. 17I have come to the view that it would be appropriate to grant a stay pending the determination of the application for leave (or the application for leave and the appeal, if the administrative decision is later taken by those to whom it falls to make such decisions that this matter should be dealt with by a concurrent hearing). The application for leave to appeal is next returnable before the Registrar on Monday 11 July 2011. I have ascertained from Mr de Robillard that it would be possible for a draft white book to be compiled by Friday 8 July 2011. I propose to direct that a draft white book be filed and served by that date. I would expect that on 11 July the parties will be in a position to put before the Registrar draft orders that would enable the matter to be brought on for a speedy determination. HIS HONOUR: Now Mr de Robillard, you give to the Court an undertaking that your client will not dispose of or encumber her assets other than in the ordinary course of business pending the determination of the appeal or further order and that she will act to bring the proceeding on with expedition. DE ROBILLARD: I do your Honour. 18HIS HONOUR: Upon those undertakings I order that any judgment in the District Court in matter number 39/07 in the General List Penrith Registry be stayed pending the determination of the present application for leave to appeal, or further order. I direct the Applicant to file and serve a draft white book by 4pm Friday 8 July 2011. 19I order that the costs of today's application be costs in the cause.